A top European official called for more authorities around the world to fortify banks’ capital buffers against an inevitable downturn at a time when the US has declined to do so and is dialing back requirements.
“The crisis demonstrated how important it is for banks to build up capital buffers in good times,” Luis de Guindos, the vice president of the European Central Bank, said today*. “In an increasing number of countries, authorities are considering activating a countercyclical buffer, as it hedges against economic and financial shocks".
The comments by the central bank’s No. 2 official are the latest instance of a European or global authority appealing for new risk-reduction efforts in the wake of the financial crisis as Trump appointees move in the opposite direction.
*”Five Years with the Euro”; Latvia; Jan. 7, 2019.
European regulator urges more bank capital against busts, as US pulls back
7 January 2019 9:30pm